The first important nationalization by a French government came in 1340, when King Philippe VI proclaimed the state salt monopoly, followed by playing cards in the 16th century and tobacco in the 17th century.
State control of vital parts of the economy has such a long tradition that when the free-enterprising then-president, Valery Giscard dEstaing, was attacking victorious Socialist challenger Francois Mitterrand during the presidential campaign on nationalizations, he refrained from criticizing in detail the Socialist shopping list of 11 industrial groups designated for takeover.
Instead, Giscard concentrated on debatable statistics about how much of the economy would wind up in government hands and on expressing fears about the most controversial aspect of the Soicialist nationalization program -- an end to private control of the relatively small proportion of French banks not already set up as state companies or cooperatives.
Mitterrand himself kept referring to Gen. Charles de Gaulle's broad nationalization program after World War II as a precedent for what he had in mind. The de Gaulle nationalizations included the country's three largest banks, Renault automobiles (France's single largest industrial company), Air France and the electric and gas utilities. Mitterrand named Jacques Piette, de Gaulle's nationalization minister, to head the group drafting the Socialists nationalization law.
Giscard's general arguments against nationalization were undercut during the campaign by the reaction of plane maker Marcel Dassault, one of France's richest men and a Gaullist parliamentarian. "If Mr. Mitterrand nationalizes me," said Dassault, "it will be because he has been elected by the French people, and the decisions of the French people should be respected by everyone. I have no quarrel with that. I was nationalized once. I'm used to it."
In fact, there are some industrialists who are suspected of looking forward to being bought out, provided the compensation is good, so that they can reinvest the liquid cash it will bring them. Economic historians note that Rothschild fortune was saved by the Socialist nationalization and compensation of their failing railroad interests in the 1930s.
There is clearly a national consensus for taking over the arms industry.
There is also a general feeling that nationalization of the pharmaceutical industry in a country where virtually all drugs are price-fixed and reimbursed through the social security system makes sense. There also seems to be little resistance to nationalizing the steel industry, which is widely considered to have been badly mismanaged. It has survived with heavy government financing to avert loss of jobs if the companies failed.
It is not just the French historcal experience that makes nationalization broadly acceptable to the French. There is also a basic cultural difference between France and America that makes many French citizens, including reputable economists, scoff at the assumption in the United States that private enterprise is automatically more efficient than the state.
Industry Minister Pierre Dreyfus, 73, president of Renault for 20 years, noted in an interview that in France top private managers and top civil servants are an interchangeable class trained in the same schools. "They come from the same breeding ground, and they move back and forth between the private and public sectors," he said. The real equivalents of the Harvard Business School and Massachusetts Institute of Technology in France are ENA, the prestigious National Administration School, and Polytechnique, the military engineering school whose graduates must pay back their tuition with a period of Army or other public service.
The majority of the presidents of the private companies on the nationalization list are former high civil servants in that mold. Asked if they could stay on in their present jobs after nationalization, Dreyfus replied, "Why not?"
Dreyfus also argues that the cultural differences extend to the nature of capitalism in the United States and Britain and in France. "Capitalism is militant in Germany, triumphant in the Anglo-Saxon world and timid in France," he said, noting that French entrepreneurs avoid risks. Renault was the first French automaker to decide to devote half its production to exports, he recalled. The other, private French car companies "followed a long time afterward," he said.
His idea of a good nationalization is on the model of Renault, where he was given broad autonomy to run it on a commercial basis. "We need to deal with the new nationalizations case by case and give the enterprises the maximum of freedom," he said.
Dreyfus' approach was strongly echoed in a separate interview by the new nationalization minister, Jean Le Garrec, whose formal title is secretary of state for the extension of the public sector. He reports directly to Prime Minister Pierre Mauroy, apparently meaning that the moderate Mauroy intends to oversee the nationalizations himself.
"Nationalization has nothing to do with bureaucratization as far as we are concerned," said Le Garrec, a former IBM executive. "We intend to create new Renaults." Asked about social experiements on the factory floor, he said he was willing to introduce proven methods for giving workers a broader say, "but we don't have the luxury of making experiments." He held up IBM as a model for employer-employe relations.
There has been an internal debate in the government about the speed of the nationalizations, and Mitterrand is understood to have ruled that they should be carried out rapidly, starting with the September parliamentary session, rather than be stretched out over a period of years, as Finance Minister Jacques Delors and others advocated.
The most anxiously awaited measure, expected to be announced in parliament Wednesday by Prime Minister Mauroy, is the form that the nationalization of the banks will take. The government has already announced that it will not nationalize foreign banks here or the huge cooperatively owned mutual bank groups that account for 40 percent of deposits. These so-called mutual innovative banks since they give great local autonomy to their broad network of branches and their closeness to their clientele translates itself into greater risks in granting loans.
There are strong reports that small regional banks will also be left in private hands.
The three big nationalized banks -- Credit Lyonnais, Societe Generale and Banque Nationale de Paris -- account for another 40 percent of deposits. They compete so heavily and act so much like private banks that the joke is circulating about the woman who told the teller at her Credit Lyonnais branch that she was withdrawing her money because she was afraid it would be taken away when the bank was nationalized.
Even though the remaining private banks are generally regarded as stodgy, the concern that is widely expressed is that once they fall into government hands, the fear of private competition will disappear -- along with the competitiveness of the state banks.
Government officials take the expression of such fears very seriously because those voicing them include large foreign depositors, led by the petrodollar depositors of the Persian Gulf. While some Socialist officials say they look forward to having the state banks act less like the private ones, the main thrust has been to try to reassure the Arab clients.
Serious consideration is being given to transforming at least one of the larger private banks with a large regional network into a cooperative.